The Ministry of Finance has begun seeking investors to transform state-owned insurance company Caminco into a semi-private company after years of delay, officials said Sunday.
Un Sovath, head of Caminco’s claims department, said the Ministry of Finance has put up at least 48 percent of the company’s shares for sale, though he declined to give details of the bidding.
“Anybody who wants to buy it should submit to the Ministry of Finance before April 30th,” Un Sovath said.
“The first step is just to sell the shares,” he said, adding that the aim is to eventually hand over Caminco completely to private investors.
The move comes six months after Indochine Insurance, formerly the nation’s largest insurance provider, collapsed into insolvency on Oct 22 because it was unable to secure the $7 million in capital needed for an insurance firm to operate here.
Indochine Director Philip Lenain alleged at the time that the Ministry of Finance was determined to drive Indochine out of business to allow Caminco a greater share of an increasingly lucrative insurance market.
A high-ranking official in the Finance Ministry, speaking on condition of anonymity Sunday, said that Caminco’s transformation into a joint venture with the private sector was a requirement for further loans from the Asian Development Bank.
“If we don’t do it, we will lose the loans,” he said. “The Ministry of Finance cannot be the regulator and the operator at the same time.”
He said Caminco now ranks third in the market, with Asia Insurance the market leader.
“The insurance market is now $9 million per year, and it increases 25 percent every year,” he said.
Vanndy Hem, financial sector program specialist at the ADB, confirmed Sunday that turning Caminco into a joint venture is a necessary condition for the government to continue receiving loans to improve the financial sector.
“As long as one of the major players is government-owned you have an unequal playing fields,” he said. He added the ADB was not forcing the government to privatize Caminco.
The National Assembly’s 2002 budget set aside $13 million to begin the partial privatization of Caminco. Vanndy Hem said it has taken four years of technical assistance by the ADB to reach this month’s offering of shares.
“It has taken a while because of problems with staffing, with capacity building: It was just not attractive to a foreign investor,” he said. “We have worked on restructuring the company to make it a more attractive.”
Forte Insurance Executive Director Charles Cheo said Sunday he was not aware Caminco had begun its move into the private sector.
“This is the first we are hearing of this,” he said.
